Finding Reliable Vendors Remains A Challenge: Nuevosol
Solar sector will remain profitable and will cater to the increasing energy demand worldwide, says CEO of Hyderabad-based Nuevosol Energy
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Hyderabad-headquartered Nuevosol Energy Private Limited is a start-up established in 2011 by team of five friends - 4 IITians and a BITS Pilani alumnus, to provide efficient solutions for the challenging-yet-rapidly growing solar industry.
In span of just 4 years, Nuevosol has become the market leader for solar module mounting solutions with revenues of Rs 177 crore in the financial year 2014-2015. Nuevosol employs 226 people and specializes in project-specific customized designs, fast-paced delivery and installation timelines and cost optimization.
In an interview with BW|Businessworld, Himamsu Popuri, CEO and Managing Director, talks about what differentiates his firm with other solar players, revenue goals, and challenges.
How is Nuevosol different from other solar firms?
Nuevosol is a dedicated turnkey solution provider for module mounting structures in India. We design, manufacture and install structures and also take care of the DC side of electrical works for solar PV projects, for both ground mounts and roof mounts. Our clients include large fortune 500 companies.
Our philosophy is as follows - 'What goes beneath the panel is as critical as the panel itself', and we channel our collective efforts to deliver complete justice to the philosophy. Our core competence in design coupled with a large investment towards R&D, amounting to 5 per cent of our annual turnover, has enabled us to always remain a few steps ahead of our competitors.
We were the first in the Indian solar market to venture into customizing mounting structures; there is some budding competition lately. But we have the first mover advantage and the clients, the likes of Azure, ReNew, TATA, juwi, Welspun, to name a few, have flooded us with repeated orders, given our edge over the others.
You plan to double your revenue in the current fiscal year. Can you detail your expansion plans that will help you achieve that target?
The previous financial year was essentially an year of consolidation, an year dedicated largely towards incorporating internal processes and procedures and structuring the firm.
We are confident that our accrued experience from the past four and half years in the solar mounting space will hold us in good stead to deliver in excess of 2GW, our order book currently has 500MW worth of projects. We have doubled the installation pace year-on-year for the past four years. By the end of 2014-2015 cumulative capacity addition by Nuevosol was 800MWs and by the end of 2015-2016 we stood at around 1500MWs (unaudited), reflecting approximately 25% of the total installations pan India. With the expertise and strong vendor base gained over these four years we are venturing into many untapped territories.
Setting up our own manufacturing plant is a part of the growth strategy; this will help us scale up our operations while providing us with greater leverage and control over supply chain as well as project management. Two additional manufacturing plants are in the pipeline for the second half of this fiscal year.
Do you think the Indian solar industry will continue to remain profitable given the recent low bidding and SunEdison's planned exit?
Solar is profitable and will remain to be so as this is the future to cater to the increasing energy demand world over. Energy from non-renewable sources is on ebb for the past few years owing to unfavorable economic conditions globally.
The government has duly recognized its true potential and has continued to disburse and align policies to proliferate growth of Solar power across the country. 12GW of PPAs have been issued already, they are to be executed in the next 18 months and another 6GW worth of PPAs are on the way. Tata Power's move to acquire Welspun’s renewable energy portfolio has cemented the opportunity and promising growth in this space. The SunEdison exit is more of its internal issue, which doesn’t hold much relevance to affect the industry as a whole.
What's the road ahead for Nuevosol? What are challenges for a startup like Nuevosol in the space which is dominated by big players?
Nuevosol is a startup based on design proficiency and there are very few players in the industry that do solar specific design, as the saying goes, 'Well begun is half done', we have cut down on the competition by choosing a niche field. But, we do have some issues to cope up with; finding reliable vendors who can deliver quality products in stringent timelines-that the industry demands-is one such. Setting up of our own manufacturing plant will go a long way in alleviating supply chain and project management-related constraints.
The road ahead I would say is more technology specific, we want to look at options to bring superior materials onto the mainstream, which are light weight yet robust.
What will be the major challenges for India to achieve 100 GW in the next 6-7 years?
Firstly, the major challenge continues to be dependence on imports to generate the necessary inventory to cater to the demand within the sector. Secondly, there is very less solar specific manufacturing/fabrication, steel/aluminum per se, happening in India. Advanced manufacturing technologies and process-oriented manufacturing technologies need to be encouraged. Collaborations with traditional manufacturing giants such as Japan and USA would provide a much necessary shot in the arm for solar-specific trade and knowledge sharing across borders.
Thirdly, there continues to be a large scope for easing of land acquisition policies. Developers continue to the face the ire of extraneous interferences at every project, leading to project delays and consequent generation losses and lost revenues.
Fourthly, the transmission infrastructure as well as grid infrastructure should be lapped up to match the rate at which Solar is going to grow to tackle the issues of variability. Discoms are already weighed down with heavy losses and are hard pressed to deal with the influx of solar power. The Government will need to take bold decisions in order to alleviate these constraints and perhaps encourage innovative Smart Grid technology as well.